John Chamberlin (Observatory Group) – Artificial Intelligence, Financial Markets and the Economic Singularity

Quantitative and passive investment strategies have steadily displaced discretionary (i.e., human) strategies over the past few decades, with no end in sight for this trend. Artificial intelligence is starting to be used in investing. This trend is not limited to the financial sector, but is rather a reflection of what’s happening in all sectors of economic activity. My contention is that as the economy consumes exponentially more computation, and the price of computational power deflates exponentially, that there is an underlying deflationary pulse across the global economy that is holding inflation and interest rates down. All the major central banks are struggling to understand this phenomenon and to hit their inflation targets, which is giving rise to new economic theories and a rejection of ones that have been assumed to be axiomatic. I discuss some of these new theories and some that are being discarded, and what this will mean for future macro-economic policy making.

Finally, I argue that the impact of automation and AI, and the subsequent low inflation low interest rates environment, is already having vast macro-economic and societal consequences, as labor markets and traditional businesses struggle to adapt to rapid automation. I use specific examples of how this phenomenon is playing out in the US, how it was partially responsible for the elections results of 2016, and how it’s shaping the 2020 election platforms.

Friday, September 6, 2019, 11:00 a.m.

Oesterreichische Nationalbank
Veranstaltungssaal, Erdgeschoß
Otto-Wagner-Platz 3
1090 Vienna

Please register until Tuesday, September 6, 2019.